Your charity’s accounts are ready, and someone on the committee has agreed to complete the Annual Information Statement. Then a question comes up about a program that changed during the year. Another answer depends on information held by a former committee member. Nobody is quite sure whether the charity’s overseas support needs further explanation.
These are the kinds of questions that can slow preparation down. The difficulty may be finding the right records, understanding what a question requires or deciding whether something needs attention beyond the return itself.
Many charities manage their AIS internally. Others benefit from assistance, particularly when circumstances have changed or the people responsible are unsure about an answer. Knowing when to seek help starts with understanding what remains unresolved.
Can your charity complete its own AIS?
Charities can prepare and submit their own AIS through the ACNC Charity Portal. The ACNC provides a guide and supporting resources, and there is no fee payable to the regulator for submission. Engaging a lawyer is not a requirement for lodging the return.
For a charity with well-maintained records and someone familiar with its reporting responsibilities, preparation may be straightforward. An internal review can help confirm that the information is accurate and that outstanding questions have been answered.
Professional support becomes useful when the team needs assistance it cannot readily provide itself. That might mean help preparing the return, checking a completed draft or obtaining advice on a particular issue. The scope should reflect the work your charity actually needs.
When questions deserve a closer look
A change in activities is one reason to pause before reusing last year’s answers. A charity established to provide local education might have begun funding projects overseas, for example. The committee may need to consider how that work relates to its purposes and what oversight arrangements are required.
Charities operating overseas, including those sending funds overseas, must comply with the ACNC External Conduct Standards. An annual reporting exercise can bring questions about those activities to the committee’s attention, but the underlying obligations apply to how the work is conducted throughout the year.
Other circumstances may warrant advice too. A newly appointed committee might inherit incomplete records or discover uncertainty about changes made by its predecessors. There may be inconsistencies between the organisation’s records and an earlier return that need to be understood before the next submission.
The reason for seeking advice should be clear. “We are unsure whether this activity falls within our charitable purposes” gives an adviser a much more useful starting point than a general request to check everything.
Where your accountant and lawyer each contribute
Your accountant will usually be the person best placed to assist with financial records and the preparation of financial statements. Where an independent financial review or audit is required, that work needs to be arranged with an appropriately qualified professional.
A lawyer’s contribution concerns legal questions arising from the charity’s activities, governing documents or reporting obligations. Depending on the agreed engagement, a lawyer may also help prepare or review the AIS and arrange authorised submission.
For example, an accountant may establish how much was paid to another organisation during the year. A legal question might concern whether the arrangement was consistent with the charity’s purposes or whether a committee member’s involvement required a conflict of interest to be managed.
The charity benefits when each adviser understands what the other is doing. Before engaging anyone, confirm who will supply the financial information, who will prepare the return and who will follow up questions that fall outside that work.
What useful AIS support should look like
An adviser should begin by understanding where your charity stands. Have you completed a draft? Are the relevant records available? Is there one difficult question, or does the team need assistance with the whole preparation process?
From there, the work can be agreed with enough detail to avoid misunderstandings. Reviewing a completed return is a different task from reconstructing missing information. Advice about a governance issue may require separate work, even if that issue first emerged while preparing the AIS.
Ask what you will need to provide and what the adviser will deliver. Clarify whether the engagement includes submission and how questions or additional work will be handled.
You should also have an opportunity to review the completed return before authorising lodgement. The people running the charity know its activities and should remain involved in confirming that the information represents them accurately.
What to prepare before an initial conversation
You do not need to resolve every uncertainty before approaching an adviser. A short explanation of your position will help them assess the work required.
Have your charity’s name and ABN available, along with its reporting period and due date. Share the previous AIS and any current draft, and explain whether your financial information is ready or still being prepared.
It is particularly useful to identify what has changed since the previous reporting period. Mention any gaps in the records and the questions your committee has been unable to answer. This helps the adviser distinguish routine preparation from matters requiring closer attention.
Approaching someone early leaves more time to obtain records and consider advice before the return is due.
How Headstart Legal can help
Headstart Legal works with charities on AIS preparation and review, including legal and governance questions that arise along the way. We can discuss what you have already prepared, where you need assistance and the scope of work appropriate to your circumstances.
If your committee would like help with its next return, visit our AIS support page to learn more or get in touch.
Discuss your charity’s AIS with Headstart Legal by getting in touch with us here.